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Price Ceilings and Floors

# Price Ceilings and Floors - Name Section Directions Use the...

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Name __________________________________ Section _________________ 1). If the price ceiling for the product is \$20, then the Quantity Sold is _________________ , the Black market or Resale Price is _________________ and the Price Ceiling is Binding / Non - Binding . 2). If the price ceiling for the product is \$20, then the Black Market Profit (per unit) is _________________ , the consumer surplus is _________________ and the deadweight loss is _________________ . . 3). If the price ceiling for the product is \$50, then the Quantity Sold is _________________ the Black market or Resale Price is _________________ and the Price Ceiling is Binding / Non - Binding . 4). If the price ceiling for the product is \$50, then the Black Market Profit (per unit) is _________________ , the consumer surplus is _________________ and the deadweight loss is _________________ . . 5). 6). If the price floor for the product is \$20, then the Quantity Sold is _________________ , the (Black market)/(Free Market) Price is _________________ and the Price Floor is Binding / Non - Binding . 7). If the price floor for the product is \$20, then the Excess Supply is _________________ , the consumer surplus is _________________ and the deadweight loss is _________________ . . 8). If the price floor for the product is \$50, then the Quantity Sold is _________________ the (Black market)/(Free Market) Price is _________________ and the Price Floor is Binding / Non - Binding . 9). If the price floor for the product is \$50, then the Excess Supply is _________________ , the consumer surplus is _________________ and the deadweight loss is _________________ . . answer. Questions 1-5 use the Price Ceiling Worksheet and 6-10 use the Price Floor Worksheet. In order to answer the question you need to select either the "Price Ceiling" or "Price Floor" tab at the bottom left of the screen. Pick the binding price ceiling from above. Explain and demonstrate how to calculate the quantity demanded, quantity supplied, quantity actually sold and the black market price. (make sure to use the supply and demand equations provided.)

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Price Ceiling 20 Parameters Concerning the Determinants of Demand Supply and Demand Equations Original Values Qd = 148.00 - 2 P Importance of Own Price 2 Qs = -42.00 + 3 P Income (in thousands) 30 Price of Substitutes 7 Equilibrium Values without Price Ceiling Market Values with Price Ceiling Price of Complements 11 Price 38.00 Black Market / Resale Price (MB of last unit) 65.00 Quantity Demanded 72.00 Quantity Demanded Under Price Ceiling 108.00 Quantity Supplied 72.00 Quantity Supplied Under Price Ceiling 18.00 Parameters Concerning Determinants of Supply Consumer Surplus 1296.00 Consumer Surplus Only 81.00 Original Values Producer Surplus 864.00 Producer Surplus 54.00 Importance of Own Price 3 Black Market Profits 0.00 Black Market Profits and/or Possible CS 810.00 Cost of Labor 6 Total Social Welfare 2160 Total Social Welfare 945.00 Cost of Capital 10 Dead Weight Loss 1215.00 Level of Technology 2 Original Values Price Quantity Demanded Quantity Supplied Qd-Qs 0 148 -42 190 1 146 -39 185 2 144 -36 180 3 142 -33 175 4 140 -30 170 5 138 -27 165 6 136 -24 160 7 134 -21 155 8 132 -18 150 9 130 -15 145 10 128 -12 140 11 126 -9 135 12 124 -6 130 13 122 -3 125 14 120 0 120 15 118 3 115 16 116 6 110 17 114 9 105 18 112 12 100 19 110 15 95 20 108 18 90 21 106 21 85 22 104 24 80 23 102 27 75 24 100 30 70 25 98 33 65 26 96 36 60 27 94 39 55 28 92 42 50 29 90 45 45 30 88 48 40 31 86 51 35 32 84 54 30 33 82 57 25 34 80 60 20 35 78 63 15 36 76 66 10 37 74 69 5 38 72 72 0 39 70 75 -5 40 68 78 -10 41 66 81 -15 42 64 84 -20 43 62 87 -25 44 60 90 -30 45 58 93 -35 46 56 96 -40 47 54 99 -45 48 52 102 -50 49 50 105 -55 50 48 108 -60 51 46 111 -65 52 44 114 -70 53 42 117 -75 54 40 120 -80 55 38 123 -85 56 36 126 -90 57
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Price Ceilings and Floors - Name Section Directions Use the...

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